Texas lawmakers OK bills to end budget stalemate

AUSTIN, Texas (AP) -- A stalemate over a Texas budget deal ended late Wednesday when the House and Senate finally backed down and approved major pieces of a roughly $100 billion spending package that is the only necessary order of business left for the Legislature.

The 140-day session ends Monday. Lawmakers are constitutionally required to pass a new two-year budget, and if they don't, Gov. Rick Perry will keep them at the Capitol until one is put on his desk.

Despite that urgency, the House and Senate began this week locked in a standoff prolonged by distrust and frustration. Evidence of strained relations continued Wednesday, when House lawmakers sunk stacks of uncontested Senate bills as retaliation.

Yet peace prevailed by nightfall: The House approved letting voters in November choose whether to create an ambitious new state water fund, while the Senate cleared a spending bill that includes pulling $2 billion from the state's Rainy Day Fund as an initial deposit.

Wrangling between the chambers involved "sometimes cussing and discussing," Democratic state Sen. Royce West said. But, he added, "we came up with a good product."

The Senate gave overwhelming approval to the spending bill, while the water plan in the House easily advanced to a final procedural vote. The only opposition came from tea party Republicans in the House who bristled at the drawdown of rainy day dollars.

The balance in the Rainy Day Fund is projected to reach $12 billion by 2015 if left unspent. Nearly $4 billion of those emergency cash reserves — which GOP leaders previously safeguarded, saying the money should be held tight for natural disasters — would be spent under the bill passed by the Senate late Wednesday.

"If a Moore, (Okla.,) tornado hit the Dallas area, we won't have enough money," Republican state Sen. Charles Perry said.

The standoff ended on a day when even Perry found himself tangled in an unexpected impasse.

His was with hecklers who crashed a business luncheon in downtown Austin and made it impossible for Perry to brag about the Texas economy while the advocates for Medicaid expansion shouted him down.

Perry eventually made peace by inviting the protesters to the Capitol for a face-to-face meeting. When order in the hotel ballroom was restored, Perry said he was optimistic about the Legislature's unfinished business.

"I happen to think that we are set on the verge with these bills to put long-term fixes on transportation and water infrastructure, to give tax relief to our citizens," Perry said.

The complexity of a new budget deal has elevated tensions and anxiety in the House and Senate, stalling passage of the deal's key components. Tumultuous budget talks between House and Senate negotiators last week ended with a deal to restore $4 billion in classroom spending that was cut in 2011.

House Democrats were wary of Senate assurances that public schools would receive an extra $200 million tucked into the supplemental spending bill.

Shortly after the Senate unveiled the measure Wednesday, the House finally brought the water fund proposal to the floor.

"What we had to do last session was a painful situation. I don't think supporting our public schools is a partisan issue," said Republican state Sen. Tommy Williams, the Senate budget chief.

The Senate spending bill also includes $450 million to repair roads left crumbling by heavy fleets of 18-wheelers and oil tankers that are clogging rural counties amid a drilling frenzy. Williams and other lawmakers had hoped this session to dip further into the Rainy Day Fund and use billions for highway projects statewide, but that plan could not find support in the House.

Other key parts of the budget deal still needs passage in the final days. House and Senate negotiators still need to hash out $1.5 billion in tax cuts, and both chambers are expected to vote on the main budget bill Saturday.

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Associated Press writer Will Weissert and Michael Brick contributed to this report.

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